Recommendations from the Harper Review of Competition Policy, which suggests reforms to planning and zoning at state government levels, has received the support of the Federal Government.
The Harper Review identified many areas where competition was being overly controlled by governments including critical areas that the states were responsible for such as planning and zoning.
The review found many planning practices favoured particular operators and zoning laws that were highly restrictive on the matter of permissible uses. The review advocates for reformed business zones by simplifying requirements and allowing a broader range of activities to be considered.
It suggests that State, territory and local governments should (where responsible) broaden business zoning and significantly reduce prescriptive planning requirements to allow the location of all retail formats in existing business zones to ensure that competition is not needlessly restricted.
Using Victoria’s 2013 reforms to planning as a case study, the review expects that if a similar regulatory system was adopted by all states the country would benefit from more mixed uses and diversity within employment precincts, a more responsive property industry and a more attractive sector for a diverse range of investment.
The review also called for the simplification of the planning process and, again, using Victoria’s VicSmart model as a yardstick, suggests that changes should be made to streamline and accelerate the development application process.
With regards to planning, the Harper Review suggested the following competition policy considerations should be taken into account:
- Arrangements that explicitly or implicitly favour particular operators are anti-competitive
- Competition between individual businesses is not in itself a relevant planning consideration
- Restrictions on the number of a particular type of retail store contained in any local area is not a relevant planning consideration
- The impact on the viability of existing businesses is not a relevant planning consideration
- Proximity restrictions on particular types of retail stores are not a relevant planning consideration
- Business zones should be as broad as possible
- Development permit processes should be simplified
- Planning systems should be consistent and transparent to avoid creating incentives for gaming appeals
The review also suggests that governments should implement reforms to ensure the rules do not unnecessarily restrict competition within two years. As part of this process, it calls for collaboration across jurisdictions to assist in developing ‘best practice’ guidelines that each government can adopt in line with its own local considerations.
GOVERNMENT RESPONSE (courtesy of the Australian Government)
"The Government supports this recommendation, noting this is an area of state responsibility. The Final Report’s findings focus on the impact of planning and zoning regulations on competition between commercial entities by creating unnecessary barriers to entry.
"The Government recognises the productivity benefits of removing unnecessary red tape and implementing effective land‐use planning, including through the transparent application of a community net‐benefits test, as proposed by Recommendation 9, supported by robust institutional arrangements to apply such a test…
"The Government encourages the states and territories to review planning and zoning regulations and include competition principles in the objectives of planning and zoning rules so that they are given due weight in decision making. The Government will continue discussions with states and territories on ways to promote these reforms. The Government is willing to consider payments to states and territories for reforms that improve productivity and lead to economic growth, including for significant regulatory reviews that are followed by reforms.
URBAN TASKFORCE ON BOARD AND ALWAYS HAS BEEN
Having always campaigned for reducing red tape controls integral to many planning instruments,developer lobby group, Urban Taskforce says it backs a more open market that benefits consumers and encourages efficiency and innovation.
CEO Chris Johnson comments that many regulatory planners would like their view on employment types and retail locations to prevail though they are often decades behind current retail market and consumer trends. For instance, there are council planners trying to keep industrial jobs in inner city locations when the structure of industry has changed and better locations are available. He also cited planning controls that unnecessarily restricted retail outlets to major centres.
Urban Taskforce observes that the planning system can take excessive and unnecessary amounts of time to pass through multiple regulatory hoops, obstructing innovation, efficiency and productivity in a fast changing world.
Johnson adds that the Federal Government has supported the Harper Review recommendation 9, which calls for a simplification of development application (permit) processes and a broadening of zoning. The state governments must, therefore, follow the lead of the Federal Government and move to further simplify planning processes, or risk increasing the cost of housing and construction through expensive holding costs.